The long, slow death of “partnership” in procurement / supply chain relationships

I've grown increasingly cynical about the use of "partnerships" and "partnering" in procurement and supply chain strategies and discussions over the last few years, as it often seemed to cloak a lack of real clarity about power, aims and objectives in supply relationships.   It may be linked to the strange failure of "supplier relationship management" to get real traction, despite what seems like a convincing case for pursuing it.  We'll come back to that no doubt at a future date.

But this might be the final nail in the coffin of "partnering", and shows why so many suppliers in particular are dubious about the whole concept.   We featured yesterday Serco's request to their suppliers to pay a 2.5% rebate on their revenue from Serco this year.  This is supposedly to offset the UK Government's 'demands' that Serco offer up some savings as part of the scheme to re-negotiate deals with the top suppliers to the Government.

We believe Serco have every right to do this; just as their suppliers have every right to tell them to get lost.  And of course Serco appear to have backed down today after Government pressure.  But without going back to the issues previously discussed, this was a quote from Serco in the Daily Telegraph (my highlighting):

Serco has confirmed the supplier letter. A spokesman said: "As part of a broader improved partnering approach with our leading suppliers we are looking into our overall commercial arrangements. This approach is a continuing process to improve our working relations with the supply chain that will lead to benefits for both our suppliers and our customers."

Oh, I see!  It is an "improved partnering approach"!  It's not a demand for money that was not in the initial contract, linked to a vague threat about future business.   And  look, here it is again in Serco's actual letter to the suppliers...

"Your response will no doubt indicate your commitment to our partnership but will also be something I will seriously consider in our working relationship as Serco continues to grow."

Right - it's a partnership! Well, as long as I know I'm in a partnership with you, then that's fine - why don't you have a 10% rebate?  20%  Half my estate and my daughter's hand in marriage?

I'm not having a go at Serco, I've seen dozens of other uses of the words in equally inappropriate circumstances.   And actually, maybe they have done the procurement profession a service.  I can't see anyone talking 'partnership' again with a straight face for quite a while; which means we may have to actually think more carefully and define exactly what we mean when we talk about supplier relationships!

Supplier partnership and partnering -  RIP (1990-2010)

First Voice

  1. Procurement Practitioner:

    At these times I’ve always found it useful to remind myself that the German word for partnership is partnerschaft. Remember that and you won’t go to wrong!

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